Coronavirus to impact U.S. retail imports during February
Since many Chinese factories shutdown because of coronavirus, the National Retail Federation (NFR) and the Hackett Associates issued their “Global Port Tracker” report, pointing out that imports at U.S. retail container ports are expected to have a drop during February.
“Many Chinese factories have already stayed closed longer than usual, and we don’t know how soon they will reopen. U.S. retailers were already beginning to shift some sourcing to other countries because of the trade war, but if shutdowns continue, we could see an impact on supply chains.”
On a year to year comparison, NFR forecasts that February will be down to 12.9% at 1.41 million TEU, while March is expected to have a decrease of 9.5% at 1.46 million TEU.
We still do not know how long will coronavirus influence the world, but many reports showed that Chinese government is trying very hard to control it. Thus we expected that April might have an increase at t 1.82 million TEU, up to 4.5% year-over-year.
Concluding, coronavirus situation causing the extended shutdown of China, freight rates might decrease a lot during this period.
Air cargo disrupted
US trade deficit drops 1.7% last year to $616.8 billion
The deficit in the trade of goods with China narrowed last year by 17.6% to $345.6 billion. Trump has imposed tariffs on $360 billion worth of Chinese imports in a battle over Beijing’s aggressive drive to challenge American technological dominance. The world’s two biggest economies reached an interim trade deal last month, and Trump dropped plans to extend the tariffs to another $160 billion in Chinese goods.
But goods trade gap with Mexico rose 26.2% last year to a record $101.8 billion. The goods deficit with the European Union also hit a record, $177.9 billion — up 5.5% from 2018.
Overall, the United States posted a $866 billion deficit in the trade of goods such as cars and appliances, down from $887.3 billion in 2018. But it ran a $249.2 billion surplus in the trade of services such as tourism and banking, down from $260 billion in 2018.
Trump campaigned on a promise to reduce America’s massive and persistent trade deficits, which he sees as a sign of economic weakness and the result of lopsided trade deals that put U.S. exporters at a disadvantage. He has negotiated a new trade agreement with Canada and Mexico that he says will bring more balance to trade in North America.
Mainstream economists argue that trade deficits are largely the result of a big economic reality that doesn’t respond much to changes in trade policy: Americans spend more than they produce, and imports fill the gap.
In December, the overall trade gap widened 11.9% percent to $48.9 billion as exports rose 0.8% to $209.6 billion and imports climbed 2.7% to $258.5 billion.
